TORONTO (miningweekly.com) – Ontario-focused gold miner St Andrew Goldfields on Thursday reported net income attributable to shareholders for the first quarter of the year was down 63% year-on-year to $1-million, or nil per share, compared with net income of $2.7-million, or $0.01 a share.
Net income for the quarter was negatively impacted by an increase in noncash depreciation and depletion expenses of $3.9-million and a $1.2-million mark-to-market loss in foreign currency derivatives.
Adjusted net earnings for the quarter ended March 31, with items removed, were down 45% to $1.1-million, or nil a share, compared with adjusted net earnings of $2-million, or $0.01 a share for the comparable period in 2012. Analysts had on average expected adjusted earnings of C$0.03 a share for the period.
Compared with the first quarter of 2012, adjusted net earnings for the quarter were also negatively impacted by the increase in depreciation and depletion expenses.
Cash provided by operating activities for the first quarter was up 70% to $14.1-million, compared with $8.3-million. Net cash flow for the quarter improved to $4.1-million, compared with net cash outflows of $1-million in the same period in 2012.
St Andrew Goldfields had lifted first-quarter production by 16% to 24 461 oz of gold from its Holt, Holloway and Hislop mines, which was slightly above expectations.
Revenue was C$38.19-million, an 11% increase over the same period a year earlier, boosted by sales of 23 009 oz of gold. The company reported an 18% increase in cash margin from mine operations at C$16.4-million.
Mine cash costs were $794/oz and royalty costs totalled $145/oz, for total cash costs per ounce of gold sold of $939/oz. The company achieved an overall unit cost reduction of $57/oz of gold sold when compared with the first quarter last year, and mine cash cost per ounce of gold sold for the quarter was lower than the company's base cost guidance.
"We are happy to report strong first-quarter results and another consecutive quarter of net cash flow generation,” CEO Jacques Perron said.
The company said it expected to produce 95 000 oz to 105 000 oz from its three active mines in Ontario, expecting mine cash costs of between $800/oz and $850/oz, before royalties.
St Andrew Goldfields added that the significant decline in the gold price, to as low as $1 378/oz, had prompted it to review its capital expenditure programmes and defer some expenditures in order to ensure the company could meet its near-term objectives, while maintaining a strong financial position.
The company’s TSX-listed shares on Friday fell 5.26% to C$0.36 apiece.